Hard to Argue With This Kind of Action

It's not exactly a secret that medical-related stocks are among some of the market leaders these days. Some, like biotech, have the aura of "hot." But others, like outpatient care and related industries -- well, "hot" is not really a word to describe them.

Despite the perception that some subsectors are more glamorous than others, it's tough to argue with stocks that are outpacing the market.

One clear price leader is DaVita (DVA), a Colorado-based dialysis services provider. The stock has rallied to new highs in each of the past five weeks, and is up nearly 30% year to date. It's currently getting support above its 15-day moving average, and below Wednesday's all-time high of $100.19.

The stock is already extended, and I'd like to see it pause for a breather at this point. But if the market continues rallying, don't be surprised if the DaVita goes with it. In that case, it may be possible to ride the wave higher, but it would be crucial to have trailing in stops in place so any gains don't evaporate into losses.

The company is set to report its second quarter Aug. 1. Analysts have pinpointed earnings at $1.47 a share on revenue of $1.94 billion. The firm beat views in each of the past four quarters.

Stocks that have had recent initial public offerings are often worth watching, because their youthful energy can translate into solid price gains. Acadia Healthcare (ACHC) made its debut in November. After its post-IPO pullback, which is typical of new stocks, it began rallying in December.

So far in 2012, Acadia has gained 66%. It pulled back sharply this week, slicing its 50-day moving average in monster volume. The move followed a Deutsche Bank valuation downgrade to Hold from Buy. Frequently, when a stock has been a strong fundamental and technical performer -- as has been the case with Acadia -- effects of a downgrade are fairly short-lived. It's not unusual to see it rebound and rally to new highs within weeks, if not days.

The Franklin, Tenn.-based company operates psychiatric outpatient treatment centers in 18 states, and it could report its second quarter as soon as next week. Analysts see the company earning $0.15 per share on revenue of $96.87 million. This will be Acadia's third quarter reporting as a public company. It met earnings views both previous times.

Shares of AmSurg (AMSG), which runs outpatient surgical centers in 35 states, rallied to an all-time high of $32.17 Thursday. This is a small company, with market capitalization of $1 billion. It's on the thinly traded side, moving 143,000 shares a day on average.

The company is due to report its second quarter after the close Monday. Wall Street is eyeing income of $0.50 per share on revenue of $228.49 million. It missed views in three of the past four quarters, meeting targets in the remaining one.

This is a stock with potential for volatile trade, carrying a beta of 1.16. Its five-day exponential moving average crossed above its 15-day EMA on June 8, and the shorter-term line has remained in the higher position since then. The stock dipped briefly below its five-day line in late June. It's held nicely above the 50-day line in that time. AmSurg has advanced 23% so far this year.

At this juncture, a pullback in the shares could be constructive. In many cases, a retreat to the 15-day line offers a springboard for further price movement. However, at this time, AmSurg is extended from moving averages, and would be better watched than bought.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.